Case summary: If you, a contractor, instruct your subcontractor to omit items of work from his subcontract, you would expect to receive a corresponding reduction in the price-wouldn’t you? Not in this case, said the Court of Appeal. The contract was a true fixed price contract, with no provisions for variations. What is more, the court refused to imply any. So the contractor could omit the work, but still had to pay the full fixed price.
Comment: The contract was of course rather unusual. Nevertheless, the case is a useful reminder of the reasons why you need clauses in contracts allowing the works to be variedparticularly where the contract is stated to be a fixed price one.
SWI Ltd v P&I Data Services Ltd (04/07/07)